Investors May Seek Safety in Dividend-Paying Investments
March 4, 2022 | James Sprow | Blue Vault
Due to geopolitical uncertainty surrounding Russia’s invasion of Ukraine and the Federal Reserve’s plans to impose rate hikes to combat soaring inflation, the Chicago Board Options Exchange Volatility Index settled at 33.3 on March 1, its highest settlement since January 2021. The index, also known as Wall Street’s “fear gauge,” is a measure of stock market volatility expectations based on S&P 500 index options.
As of March 3, 2022, the dividend yield on the S&P 500 market index was 1.38%. The dividend yield on the FTSE NAREIT U.S. Real Estate Index Series, an index of listed REITs, YTD through January 31, 2022, was 3.08%. Based upon the price of Class I shares for Blackstone REIT of $14.53 as of February 25, 2022, and the Class I distributions per share declared for February 2022, of $0.0547, the estimated annualized distribution yield would be 4.52%.
If there is a movement by investors toward the safety of dividends, continuously offered nontraded REIT shares could be attractive.
Sources: S&P Global Market Intelligence, SEC, Yahoo Finance
